Washington Department of Revenue has issued an emergency amended rule (Rule 196), which limites application of bad debt refunds.
The new law which amends rule WAC 458-20-196, states that Washington’s sales tax “bad debt” deduction may only be claimed by the actual seller after June 30, 2010
The new law clarifies that the seller’s right to claim a credit or refund is not assignable. If the original seller in the transaction that generated the bad debt has sold or assigned the bad debt instrument to a third-party with recourse, the original seller may claim a credit or refund under statute, but only after the debt instrument is reassigned by the third-party to the original seller.
The amended rule specifically recognizes that only the original seller in the transaction that generated the bad debt, or a certified service provider used by the seller, may claim a retail sales/use tax credit or refund on or after July 1, 2010.
Monday, July 19, 2010
Monday, June 28, 2010
Colorado Reportable and Listed Transaction Disclosure
In today's Blog, I address the timing of taxpayer disclosure, highlighting the upcoming July 1, 2010 deadline for tax returns filed after June 1, 2009.
Overview
On April 2, 2009, Colorado adopted House Bill 09-1093, which require taxpayers to disclose participation in "reportable' and "listed transactions'. taxpayers subject to these disclosure provisions include corporations, individuals, estates, trusts, partnerships, S Corporations and other entities required to file an income tax return under Col. Rev. Sta. Sec. 39-22-601.
The new law also requires "material ad visors" to disclose reportable and listed transactions and maintain a list of persons advised with respect to such transactions. Significant taxpayers and material advisor penalties are imposed for failure to comply with these requirements.
Definition
Colorado Listed Transaction
For Colorado purposes a "listed transactions" also includes a "transaction" between a captive real estate investment trust and its more than 50% beneficial owner, and a transaction between a captive regulated investment company and its more than 50% beneficial owner. Pursuant to Colo. Code Reg. sec. 39-22-652(2)(b), these transactions are referred to as "Colorado Listed Transactions' where the relevant tax returns "reflect a Colorado tax benefit".
Taxpayer Disclosure Requirement
Disclosure Timing
Under the general rule, for each tax period in which a taxpayer participates in a Federal Transaction or a Colorado Listed Transactions, including participation for any prior period that is still open for assessment under the statute of limitations, the taxpayer is required to disclose that participation with its next filed tax return. For any return filed after June 1, 2009, a taxpayer should disclose with its return participation in any Federal Transaction or a Colorado Listed Transaction, including any participation for prior periods still open for assessment. For any return made after June 1, 2009, disclosure will be considered timely so long as that disclosure is made by July 1, 2010.
Taxpayer Penalties
A taxpayer who fails to disclose a reportable transaction is subject to a penlaty of up to $15,000. A taxpayer who failes to disclsoe a listed transaction is subject toa penalty of up to $50,000. these penalties are in additin to any other penalties that may be imposed, but may be wavied, reduced or compromised by the Colorado Department of Revneu upon showing of reasonable cause.
Overview
On April 2, 2009, Colorado adopted House Bill 09-1093, which require taxpayers to disclose participation in "reportable' and "listed transactions'. taxpayers subject to these disclosure provisions include corporations, individuals, estates, trusts, partnerships, S Corporations and other entities required to file an income tax return under Col. Rev. Sta. Sec. 39-22-601.
The new law also requires "material ad visors" to disclose reportable and listed transactions and maintain a list of persons advised with respect to such transactions. Significant taxpayers and material advisor penalties are imposed for failure to comply with these requirements.
Definition
Colorado Listed Transaction
For Colorado purposes a "listed transactions" also includes a "transaction" between a captive real estate investment trust and its more than 50% beneficial owner, and a transaction between a captive regulated investment company and its more than 50% beneficial owner. Pursuant to Colo. Code Reg. sec. 39-22-652(2)(b), these transactions are referred to as "Colorado Listed Transactions' where the relevant tax returns "reflect a Colorado tax benefit".
Taxpayer Disclosure Requirement
Disclosure Timing
Under the general rule, for each tax period in which a taxpayer participates in a Federal Transaction or a Colorado Listed Transactions, including participation for any prior period that is still open for assessment under the statute of limitations, the taxpayer is required to disclose that participation with its next filed tax return. For any return filed after June 1, 2009, a taxpayer should disclose with its return participation in any Federal Transaction or a Colorado Listed Transaction, including any participation for prior periods still open for assessment. For any return made after June 1, 2009, disclosure will be considered timely so long as that disclosure is made by July 1, 2010.
Taxpayer Penalties
A taxpayer who fails to disclose a reportable transaction is subject to a penlaty of up to $15,000. A taxpayer who failes to disclsoe a listed transaction is subject toa penalty of up to $50,000. these penalties are in additin to any other penalties that may be imposed, but may be wavied, reduced or compromised by the Colorado Department of Revneu upon showing of reasonable cause.
Thursday, June 24, 2010
Kansas: Amnesty Program Enacted
Kansas: Amnesty Program Enacted
TIME PERIOD
Legislation (Senate Bill 572, signed May 27, 2010) establishes a tax amnesty program to be held from September 1, 2010, through October 15, 2010.
APPLIES TO WHICH TAXES
The program applies to a myriad of Kansas taxes, including sales and use, income, and withholding taxes.
Amnesty is available for tax liabilities due and unpaid for tax periods ending on or before December 31, 2008.
TAXES NOT ELIGIBLE
Amnesty is not available for (1) taxes resulting from an audit if the taxpayer received notification as to the starting date of the audit prior to September 1, 2010, or (2) taxes due as a result of an audit that is underway as of September 1, 2010.
Also not eligible are taxes for which an assessment or proposed assessment has been issued as of September 1, 2010, or assessments that are being appealed administratively or judicially as of that date.
PROCEDURE
Eligible taxpayers that file all required returns and pay all taxes due by the close of the amnesty program will receive a waiver of all penalties and interest otherwise due.
Taxpayers should be aware that participation in the amnesty program constitutes relinquishment of all administrative and judicial rights of appeal with respect to taxes eligible for amnesty. In addition, no tax payments received as a result of the amnesty program are eligible for refunds or credits.
TIME PERIOD
Legislation (Senate Bill 572, signed May 27, 2010) establishes a tax amnesty program to be held from September 1, 2010, through October 15, 2010.
APPLIES TO WHICH TAXES
The program applies to a myriad of Kansas taxes, including sales and use, income, and withholding taxes.
Amnesty is available for tax liabilities due and unpaid for tax periods ending on or before December 31, 2008.
TAXES NOT ELIGIBLE
Amnesty is not available for (1) taxes resulting from an audit if the taxpayer received notification as to the starting date of the audit prior to September 1, 2010, or (2) taxes due as a result of an audit that is underway as of September 1, 2010.
Also not eligible are taxes for which an assessment or proposed assessment has been issued as of September 1, 2010, or assessments that are being appealed administratively or judicially as of that date.
PROCEDURE
Eligible taxpayers that file all required returns and pay all taxes due by the close of the amnesty program will receive a waiver of all penalties and interest otherwise due.
Taxpayers should be aware that participation in the amnesty program constitutes relinquishment of all administrative and judicial rights of appeal with respect to taxes eligible for amnesty. In addition, no tax payments received as a result of the amnesty program are eligible for refunds or credits.
Friday, June 18, 2010
Georgia & Oklahoma Decouple From IRC Sec. 108(1)
State Tax Update - Income/Franchise Tax:
The States have spent their portion of the stimulus money and they are looking for new ways to get money. Georgia and Oklahoma recently passed legislation decoupling from select provisions of the federal American Recovery and Reinvestment Act of 2009 (ARRA) for state corporate and personal income tax purposes (i.e. ,deferral of recognition of income from discharge of certain business indebtedness under IRC Sec. 108(i)).The following summarizes the new laws:
Georgia:
Although Georgia’s legislation was signed into law on June 3, 2010, the new law applies to tax years beginning on Jan 1, 2009.
For taxable years beginning on or after January 1, 2009, the law specifically decouples from select provisions of the federal American Recovery and Reinvestment Act of 2009 (ARRA) for state corporate and personal income tax purposes, including the:
• Deferral of recognition of income from discharge of certain business indebtedness under IRC Sec. 108(i), and
• Expanded carry back period for net operating losses (NOLs) of certain small businesses under IRC Sec. 172(b)(1)(H).
Additionally, with respect to stock purchases and sales occurring on or after June 3, 2010, the new law also requires that all IRC Sec. 338 elections apply for purposes of calculating a corporation’s Georgia taxable net income.
Oklahoma:
Applicable for taxable years beginning on or after January 1, 2010, new law requires Oklahoma corporate and personal income taxpayers to add to their Oklahoma taxable income an amount equal to the amount of deferred income not included in such taxable income pursuant to Internal Revenue Code (IRC) Sec. 108(i)(1), as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009 (P.L. No. 111-5).
The new law correspondingly requires a subtraction from Oklahoma taxable income for the amount of deferred income included in their taxable income pursuant to IRC Sec. 108(i)(1), as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009 (P.L. No. 111-5).
The States have spent their portion of the stimulus money and they are looking for new ways to get money. Georgia and Oklahoma recently passed legislation decoupling from select provisions of the federal American Recovery and Reinvestment Act of 2009 (ARRA) for state corporate and personal income tax purposes (i.e. ,deferral of recognition of income from discharge of certain business indebtedness under IRC Sec. 108(i)).The following summarizes the new laws:
Georgia:
Although Georgia’s legislation was signed into law on June 3, 2010, the new law applies to tax years beginning on Jan 1, 2009.
For taxable years beginning on or after January 1, 2009, the law specifically decouples from select provisions of the federal American Recovery and Reinvestment Act of 2009 (ARRA) for state corporate and personal income tax purposes, including the:
• Deferral of recognition of income from discharge of certain business indebtedness under IRC Sec. 108(i), and
• Expanded carry back period for net operating losses (NOLs) of certain small businesses under IRC Sec. 172(b)(1)(H).
Additionally, with respect to stock purchases and sales occurring on or after June 3, 2010, the new law also requires that all IRC Sec. 338 elections apply for purposes of calculating a corporation’s Georgia taxable net income.
Oklahoma:
Applicable for taxable years beginning on or after January 1, 2010, new law requires Oklahoma corporate and personal income taxpayers to add to their Oklahoma taxable income an amount equal to the amount of deferred income not included in such taxable income pursuant to Internal Revenue Code (IRC) Sec. 108(i)(1), as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009 (P.L. No. 111-5).
The new law correspondingly requires a subtraction from Oklahoma taxable income for the amount of deferred income included in their taxable income pursuant to IRC Sec. 108(i)(1), as amended by Section 1231 of the American Recovery and Reinvestment Act of 2009 (P.L. No. 111-5).
Friday, June 11, 2010
Florida Enacts Amnesty Program
The Governor of Florida signed H5801 into law on May 28, 2010 which created an Amnesty Program.
The amnesty program runs from July 1, 2010 to September 30, 2010. Under the program, eligible taxpayers may satisfy their state tax liabilities and avoid criminal prosecution and penalties. In addition, interest may be decreased up to 50% in certain cases.
Eligible Taxes
The taxes eligible under the program are: sales tax, fuel tax, corporate income tax, communications services tax, gross receipts tax, and Florida intangible tax.
Taxpayers Under Audit
Taxpayers who are currently under audit or have been contacted for audit, may still apply for amnesty; however, taxpayers will be required to pay the tax and 75% of the interest due.
Taxpayers Who Have Not Been Contacted
Taxpayers who have not been contacted by the state of Florida and come forward during the amnesty period, will be required to pay the tax and 50% of the interest due.
The amnesty program runs from July 1, 2010 to September 30, 2010. Under the program, eligible taxpayers may satisfy their state tax liabilities and avoid criminal prosecution and penalties. In addition, interest may be decreased up to 50% in certain cases.
Eligible Taxes
The taxes eligible under the program are: sales tax, fuel tax, corporate income tax, communications services tax, gross receipts tax, and Florida intangible tax.
Taxpayers Under Audit
Taxpayers who are currently under audit or have been contacted for audit, may still apply for amnesty; however, taxpayers will be required to pay the tax and 75% of the interest due.
Taxpayers Who Have Not Been Contacted
Taxpayers who have not been contacted by the state of Florida and come forward during the amnesty period, will be required to pay the tax and 50% of the interest due.
Thursday, May 27, 2010
Florida Amnesty Program
Florida expects to generate $82.9 million in revenue from the state’s first amnesty program since 2003. House Bill 5801 was approved by both chambers on April 30, 2010, the closing day of the Florida Legislature’s 60-day session. It now awaits action by Florida Governor Charlie Crist.
House Bill 5801 directs the Florida Department of Revenue (“Department”) to conduct a tax amnesty from July 1 through September 30, 2010 applicable to tax liabilities due prior to July 1, 2010.
The Program will apply to all income taxes, sales and use taxes, motor vehicle taxes, estate taxes, gross receipts taxes, excise taxes on documents, taxes on intangible personal property, communications services taxes, severance taxes, and insurance premium taxes. It will not apply to local option taxes administered by local governments unless the local government elects to participate and notifies the Department by June 1, 2010.
All taxpayers are eligible for the Program, except those currently under criminal investigation, indictment, information, or prosecution regarding a Florida revenue law. Taxpayers who have entered into settlements of liability for state or local option taxes before July 1, 2010 are also ineligible to participate, whether or not full and complete payment of the settlement amount has been made.
Taxpayers who are under audit, inquiry, examination, or civil investigation by the Department may participate and are responsible for the full amount of tax due but receive a 25% reduction in interest. A taxpayer who initiates contact with the Department is responsible for the full amount of tax due but receives a 50% reduction in interest. Late penalties are waived on any tax paid pursuant to the Program.
Participating taxpayers are required to waive any right to claim a refund, protest, or initiate any administrative proceeding that challenges any assessment administered under the Program. Pre-existing protests or administrative or judicial proceedings must be dismissed. The bill permits the Department to rescind a grant of amnesty in the event of fraud, misrepresentation, or mutual mistake of fact.
Karen Lake
305-960-1202
klake@bdpb.com
House Bill 5801 directs the Florida Department of Revenue (“Department”) to conduct a tax amnesty from July 1 through September 30, 2010 applicable to tax liabilities due prior to July 1, 2010.
The Program will apply to all income taxes, sales and use taxes, motor vehicle taxes, estate taxes, gross receipts taxes, excise taxes on documents, taxes on intangible personal property, communications services taxes, severance taxes, and insurance premium taxes. It will not apply to local option taxes administered by local governments unless the local government elects to participate and notifies the Department by June 1, 2010.
All taxpayers are eligible for the Program, except those currently under criminal investigation, indictment, information, or prosecution regarding a Florida revenue law. Taxpayers who have entered into settlements of liability for state or local option taxes before July 1, 2010 are also ineligible to participate, whether or not full and complete payment of the settlement amount has been made.
Taxpayers who are under audit, inquiry, examination, or civil investigation by the Department may participate and are responsible for the full amount of tax due but receive a 25% reduction in interest. A taxpayer who initiates contact with the Department is responsible for the full amount of tax due but receives a 50% reduction in interest. Late penalties are waived on any tax paid pursuant to the Program.
Participating taxpayers are required to waive any right to claim a refund, protest, or initiate any administrative proceeding that challenges any assessment administered under the Program. Pre-existing protests or administrative or judicial proceedings must be dismissed. The bill permits the Department to rescind a grant of amnesty in the event of fraud, misrepresentation, or mutual mistake of fact.
Karen Lake
305-960-1202
klake@bdpb.com
Wednesday, May 19, 2010
North Carolina - Internet Transaction Resolution Program
The North Carolina Department of Revenue ("Department") recently announced the "Internet Transaction Resolution Program" ("Program") designed for remote sellers affected by the remote seller nexus law enacted by the State in August 2009.
Under the terms of the Program, as applied to eligible participating retailers, the Department will agree not to assess sales and use tax, franchise tax, penalties, and interest due prior to September 1, 2010. Also, the Department will agree not to excise its authority to obtain consumer information from retailers to collect tax liabilities for tax liabilities for periods prior to September 1, 2010.
To participate in the Program, eligible retailers must submit an election form to the Department not later than June 30, 2010. Any retailer that failed to register for the sales and use tax as a result of having operated an affiliate program in North Carolina at any time is eligible to particulate in the Program.
Karen Lake
klake@bdpb.com
305-960-1202
Under the terms of the Program, as applied to eligible participating retailers, the Department will agree not to assess sales and use tax, franchise tax, penalties, and interest due prior to September 1, 2010. Also, the Department will agree not to excise its authority to obtain consumer information from retailers to collect tax liabilities for tax liabilities for periods prior to September 1, 2010.
To participate in the Program, eligible retailers must submit an election form to the Department not later than June 30, 2010. Any retailer that failed to register for the sales and use tax as a result of having operated an affiliate program in North Carolina at any time is eligible to particulate in the Program.
Karen Lake
klake@bdpb.com
305-960-1202
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